Going off the grid could widen inequality gap
THE inequality gap is widening between well-to-do households, who can shield against electricity and water interruptions, and poorer households who cannot and this needs to be addressed urgently.
On Wednesday, the country was producing 352MW from both Kariba and Hwange, falling far short of the market demand of 1800MW.
Kariba was producing just 280MW from an installed capacity of 1050MW while Hwange was producing just 72MW out of an installed capacity of 920MW.
Low water levels at Kariba and constant breakdowns and Hwange, due to old equipment, have literary left the country in the dark.
On Tuesday, out of the 6 units at Hwange, only 1 was operating while the rest were down.
While Kariba can get back to normal, subject to improvement in usable water levels, Hwange is pinning its hopes on the retooling of the old units and the coming on board of two more units (7 and 8).
The old units at Hwange are expected to be de-commissioned and retooled in phases after Government reportedly secured US$310 million from the Export-Import Bank of India.
This is expected to be done after the commissioning of Hwange units 7 and 8. Commissioning of the two new units is proving elusive with dates being changed several times since the first promise for commissioning for September 2022.
The above are some of the factors that have seen the country experience load shedding of up to 18 hours per day.
The situation could have been worse were it not for imports.
The country is reportedly importing between 440MW-520MW from Hidroeléctrica de Cahora Bassa, Electricidade de Moçambique (Mozambique); Eskom (SA) and Zesco (Zambia).
The situation almost certainly will not improve any time soon.
At the same time, Harare — Zimbabwe’s capital city and its economic hub — has experienced critical water supply issues for several years now.
Intermittent pumping of water because of non-availability of water-treating chemicals and infrastructure failure has led to demand outstripping water supply. Residents are experiencing water rationing of at least 48 hours per week.
Inequality gap
The energy and water crisis has worsened a situation that was already dire.
According to the 2022 Population and Housing Census released by ZimStat, 33,7 percent of households are using grid electricity while households with access to piped water in their yard for drinking stood at 30 percent.
Many private individuals and businesses are investing in alternative electricity and water sources as a way of maintaining a level of normality and surviving through unreliable water and electricity supply.
Alternative sources of power include solar panels and diesel generators. For water, alternative sources include boreholes and water tanks.
For both, the exact number is not known as most of these sources are not registered.
But the cumulative effect of these individual actions could have significant consequences for inequality and service provision as poor households are less able to afford alternatives for power and water.
For electricity, a 0.3 kilowatt home solar system to cover lighting and entertainment will cost not less than US$820, according to industry experts.
For water, a borehole system will cost nothing less than US$3 000.
Even with financing options, most households can’t afford alternatives.
While Government, through the Rural Electrification Agency (REA), has increased access to electricity, the ongoing load shedding means the gap is clearly widening between affluent households who can shield themselves from electricity and water interruptions and poorer households who cannot afford to do so.
There’s also the risk that ZESA and municipalities will gradually be unable to cross-subsidise services to the poor as they lose revenue from wealthy consumers.
Further, private borehole installations could negatively affect groundwater management and undermine the availability of these water resources for broader society.
The solution
Trigrams Investment analyst, Walter Mandeya, spoke of three key issues that need to be addressed.
First, being the regulatory superstructure to allow for more efficient private players to provide infrastructure and services alongside local authorities and utilities.
“Current models are failing because they are not only too top heavy, they also add burden to poorly skilled and capacitated institutions. There is room to extend these services to be provided by independent players who will be restricted to acting locally with clear objectives, infrastructure development goals, cost structuring, billing, reporting, etc, ensuring efficiencies from specialisation.”
Second, funding through capital markets to allow the harnessing of local savings for capital projects, which need to be subjected to market scrutiny for quality and viability of the underlying projects.
“Although local authorities and state enterprises serve greater national interests, their services still need to also be provided at prices above cost and markets are very efficient at assessing viability and efficiency of operations as well as pricing for these aspects.
“Those with quality projects will get cheaper funding quicker, those with poor projects will be rejected funding until they improve the quality of their project ideas,” Mandeya said.
Third, upgrading of skills and capacity in the administrators and technicians tasking with implementation of these projects.”
“One of the key things that we forget when we discuss such issues is the gradual debilitating loss of skills and capacity that has been experienced by local authorities and state institutions in the country. We have moved from having highly skilled managers, trained for purpose to having poorly paid administrators and technicians who lack the basic incentives to perform at their peak.
“So, for us to even start to discuss solutions, we need to acknowledge that the technical administrators and technicians tasked with implementing these solutions need to be adequately compensated,” Mandeya said.